Shell flags Q2 gas hit, margin improvement

Shell released an update on 7 July 2026 setting out key indicators for its second‑quarter 2026 performance ahead of full results due on 30 July 2026. The update focuses on expected production in the Integrated Gas business, LNG liquefaction volumes, working‑capital movements and indicative refining and chemicals margins. The company also provided guidance on Trading & Optimisation performance within the Integrated Gas division.

For the April–June 2026 period, Shell expects Integrated Gas production of 610,000–650,000 barrels of oil equivalent per day. This compares with reported production of 909,000 boe/d in the first quarter of 2026. Shell links the anticipated reduction in output to the impact of the Middle East conflict on Qatari volumes within its portfolio.

Shell also provided guidance on its LNG liquefaction activity. Liquefaction volumes in the second quarter are projected at 7.4–7.8 million tonnes, versus 7.9 million tonnes achieved in the first quarter of 2026. The lower production and liquefaction guidance underscores the operational impact of disrupted Qatari volumes on the Integrated Gas segment.

Shell expects a significant change in working‑capital movements between the first and second quarters of 2026. After recording an $11.2 billion working‑capital outflow in Q1, the company now forecasts a working‑capital inflow of between $1 billion and $6 billion in Q2. Shell attributes this swing to unprecedented volatility in commodity prices, which is affecting timing and valuation of cash flows across its operations.

The anticipated inflow suggests a more supportive short‑term cash‑flow profile versus the prior quarter. However, Shell notes that such movements are closely tied to commodity‑price dynamics, which remain highly volatile.

Alongside volume guidance, Shell reported an improvement in indicative margins in its downstream and chemicals businesses for the second quarter of 2026. The indicative refining margin is expected to rise to about $20 per barrel, compared with $17 per barrel previously. The indicative chemicals margin is projected to increase to about $240 per tonne, from $139 per tonne.

Given market dislocations, Shell notes that realised refining and chemicals margins are lower than the calculated indicative refining and chemicals margins and have been adjusted accordingly. Within the Integrated Gas division, the company’s update states that Trading & Optimisation performance in Q2 is expected to be in line with the first quarter of 2026. Shell also reiterates that its forward‑looking statements are subject to risks and uncertainties, and it does not provide assurance that future dividend payments will match or exceed previous distributions.